Despite the pressure of high fuel and other operating costs, more than half (51%) of UK third party logistics (3PL) companies expect to invest more in equipment, people and premises in 2014 than they did in 2013.
This was one of the findings of 3PL 2013 – a recent survey of warehouse operators undertaken by the industry’s trade body UKWA.
UKWA said the findings would be welcomed by suppliers to the industry and reflected a renewed sense of optimism across the logistics sector.
The majority of respondents (53%) expect to see their investment in IT increase next year, while 49% are preparing to spend more on their vehicle fleets. Extra staff (47%), bigger premises (47%) and materials handling equipment (39%) are other areas where respondents predicted that they will be spending more. Only 10% foresaw a decline in their year-on-year spending.
The survey also showed that in 2013 most workers (61%) employed in the sector received a modest pay rise with the majority (67%) being awarded an increase of 3% or less while 33% enjoyed an above-inflation salary boost of between 3 and 5%. Nearly half (47%) expect to be able to give a general pay rise to all staff in 2014.
When asked to rate the greatest threats to their business, respondents cited increased price competition, cost inflation (particularly fuel) and red tape.
The majority of respondents (82%) had increased the cost of their services by up to 5% to cover rising fuel charges. A small number (5%) raised their prices by more than 10% to offset the rising price of fuel.
But respondents had other ways of countering fuel costs in addition to price hikes. 35% had introduced fuel monitoring technology and put more emphasis on better driver training, while some companies (12%) had sought to mitigate the impact of fuel price rises by negotiating fixed rate deals from their suppliers and others (12%) had switched fuel suppliers.
Despite concerns about fuel prices, there appears to be little appetite within the sector to embrace rail as an alternative to moving goods by road. When asked if they are likely to use rail transport to distribute products over the next 12 months 82% responded ‘rarely’, 11% answered ‘sometimes’ and just 7% said ‘regularly’.
Commenting on the findings, UKWA chief executive Roger Williams (pictured) said the survey provided a useful snapshot of the industry as it emerged from one of the longest and most difficult economic downturns many people could remember.
This material is protected by copyright Ken Hurst 2013.